Funding 21st century tourism destination development and management hermione nevill
Future Destination Marketing Funding Models
-
Upload
destination-marketing-association-international -
Category
Travel
-
view
887 -
download
0
description
Transcript of Future Destination Marketing Funding Models
![Page 1: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/1.jpg)
2013 CEO FORUM
Future Funding Models
![Page 2: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/2.jpg)
Tourism Matters!
Tourism is a top-ten employer in 48 states
$124 billion tax revenue
1 of 9 jobs depends on tourism
![Page 3: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/3.jpg)
But, government funds for tourism marketing…
Are being cut!
![Page 4: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/4.jpg)
Tourism Funding
• Untethered allocations• Tethered allocations• Dedicated tax
– Tax increment financing
• Assessment
• Membership• Event revenue• Sponsorships• Contract services
PrivatePublic
![Page 5: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/5.jpg)
Traditional private funds simply aren’t enough.
![Page 6: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/6.jpg)
TIDs are an answer…
Funding
OversightStability
![Page 7: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/7.jpg)
Hotels pay an assessment…
Collected by the local government…
And managed by the DMO.
![Page 8: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/8.jpg)
Partnerships are best…
Drivers
Beneficiaries
Managers
Private
Guidelines
Compulsory
Sunset
Public
![Page 9: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/9.jpg)
Payors
Government
DMO
![Page 10: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/10.jpg)
TIDs are growing…
![Page 11: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/11.jpg)
![Page 12: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/12.jpg)
![Page 13: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/13.jpg)
![Page 14: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/14.jpg)
![Page 15: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/15.jpg)
Competi-tors
No Fund-ing
Budget Reduction
Other
Why did your destination form a TID?
![Page 16: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/16.jpg)
How many months did it take to form your TID?
<6 6-12 12-18 18+0
10
20
30
40
50
60
70
80
6
68
24
6
![Page 17: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/17.jpg)
Laws
Plan
Classification
ApprovalSunset
Non-Profit
![Page 18: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/18.jpg)
California has two TID laws…
• No petition• 1 year term• Annual renewal• Business only• Appointed advisory
board• City can disestablish
• 50% + 1 petition• 5 or 10 year term• Business or property• Non-profit
management• Annual report• Payors can
disestablish
1994 Law1989 Law
![Page 19: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/19.jpg)
Montana has 1 TID law…
Property-based
60% footprint petition
Collected with property taxes
3-10 year term
Payors can disestablish
DMO must manage
![Page 20: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/20.jpg)
Montana has seen results…
+ 4.3% demand(Billings)
Awareness up5-10X
3.50:1 ROI
+9.2% ADR(Billings)
10 district
s
![Page 21: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/21.jpg)
Budgets have increased…
Average
Billings
W. Yellowstone
Helena
0
200,
000
400,
000
600,
000
800,
000
1,00
0,00
0
98,333
200,000
93,000
80,000
433,666
850,000
418,000
283,000
Post-TIDPre-TID
![Page 22: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/22.jpg)
Washington has a TID law…
Convention and tourism promotion
40+ rooms
400,000 < Population > 1,000,000
$2.00 per room
Payors can disestablish
![Page 23: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/23.jpg)
Texas has a narrow TID law…
100+ rooms
Special benefit
Population >
1,000,000
Council-manager governme
nt
![Page 24: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/24.jpg)
Portland formed a TID by charter…
50 + rooms
2% assessment
5-year termination hearing
Travel Portland
![Page 25: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/25.jpg)
1• Legislation
2• Structure
3• Business Plan
4• Owner Approval
5• Government Approval
Five steps to TID formation:
![Page 26: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/26.jpg)
Management is a balancing act...
DMO
CVB
membersHotels
![Page 27: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/27.jpg)
There are many different ways to structure TID
management.
![Page 28: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/28.jpg)
An existing nonprofit can manage…
Board Hotel, Restaurant, Retail
Government RepresentativesElect directors & officers
Executive CommitteeSet Policy
Duties delegated by Board
Nominating Committee
Audit Committee
Compensation Committee
Sales Committe
Marketing Committee
![Page 29: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/29.jpg)
Or work with a new corporation…
Existing CorporationProgram Implementation
Executive Committee
Sales & Marketing Committee
(formerly the TMD Executive
Committee)
Nominating Committee Audit Committee Finance Committee
New Hotel CorporationOversight
Contract
![Page 30: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/30.jpg)
Or, a hotel corporation can manage.
Board of Directors Hotels
(Funding Only – No Marketing)
DMOLodging & Other Representatives
Develop annual budget
Other VendorsSpecial Initiatives
Events
![Page 31: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/31.jpg)
Existing TIDs have seen great returns.
![Page 32: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/32.jpg)
Los Angeles created a TID in 2011.
It raises over $13 million annually
The total paid by guests, with TOT, is 15.5%
![Page 33: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/33.jpg)
![Page 34: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/34.jpg)
3 cities & county
$0.50 - $2.00 per night
88 hotels
=47,888 room nights generated
Since 2010
![Page 35: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/35.jpg)
Lodging Performance
2010 2011 $-
$50.00
$100.00
$150.00
$200.00
$166.4
5
$176.0
0 $109.9
4
$116.3
5
ADR
Santa Barbara
California
2010 201155%
60%
65%
70%
75%
67%70%
63%67%
Occupancy
![Page 36: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/36.jpg)
Napa Valley created a TID in 2010.
It raises over $4 million annually
The total paid by guests, with TOT, is 14%
![Page 37: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/37.jpg)
Napa Valley Sonoma County
Monterey County
Livermore0
1
2
3
4
5
6
Funding Levels
Pre-TIDPost-TID
![Page 38: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/38.jpg)
5 cities & county
2% of room revenue
$4 million annually
25% goes to local committees
Since 2010
![Page 39: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/39.jpg)
Occupancy ADR RevPAR Revenue0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
0.6%
5.0%
5.7%
9.0%
2012 – 2013 Growth
![Page 40: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/40.jpg)
High Season Low Season Total Seasons Running 12 Months
5.0%
12.2%
7.4%
6.1%
2012 – 2013 High / Low Season Growth
![Page 41: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/41.jpg)
3 employees
6 partners
19 employees
170 partners
![Page 42: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/42.jpg)
Some state tourism offices also have districts…
![Page 43: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/43.jpg)
There are four types of state funding…
General fund appropriations
Room / bed tax
Tax increment financing
Variegated sources
![Page 44: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/44.jpg)
TN, NC, ND, WY, MN, PA, RI, NY, MI, MS, MA, MD, VT, VA, GA, CT SC,
KY
MO, UT
IL, HI, MT, DE, ID, TX, OR, AL, NE, NV, NJ, KY
KS, CO, WA, WV,
AZ, CA, LA, OK
General Fund
OH
FL, NM, WI, AK,
IA
NH, ME
IN, SD, AR
Variegated Sales TIF
Room Tax
Funding Sources By State
![Page 45: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/45.jpg)
There are resources!
![Page 46: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/46.jpg)
![Page 47: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/47.jpg)
![Page 48: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/48.jpg)
![Page 49: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/49.jpg)
It isn’t always easy…
![Page 50: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/50.jpg)
California has Proposition 26…Voters approved in November 2010-Article XIIIC of CA Constitution
All levies are a tax and require a 2/3 vote of the electorate, unless:
Seven exceptions:
• A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged
• A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged
![Page 51: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/51.jpg)
Partnerships aren’t always perfect…
Strong mayor
District approved, but contract not signed
Council strongly supports district
Mayor successful at delay
![Page 52: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/52.jpg)
If hotels can do it, why not others?
Restaurants Retail Attraction
s Wineries Auto
![Page 53: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/53.jpg)
Mammoth Lakes TID
Included Business Types
• Attractions• Restaurants• Retail• Transportation• Other tourism related
Challenge is linkage between programs and assessees as defined businesses
Restaurant/Retail Districts have been created
![Page 54: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/54.jpg)
Newport Organizational Chart
Visit Newport Beach
501 (c)(6)6-member board
TBID management/Brown Act
Newport Beach Foundation
501(c)(3)Fundraising Arm(Potential Future
Organization)
Newport Beach & Co.
501(c)(6)TOT Funds
24-member boardNo Brown Act
Dine Newport Beach
RBID Management
Marketing
Film Newport Beach
Attract film companies
Revenue from permits
Celebrate Newport Beach
Execute eventsDevelop new
events
Enterprise Newport Beach
B-2-B & BID marketing
![Page 55: Future Destination Marketing Funding Models](https://reader033.fdocuments.in/reader033/viewer/2022061218/54b6bc574a795956098b457f/html5/thumbnails/55.jpg)
Questions and Comments
Thank you!
John Lambeth, PresdientCivitas
www.civitasadvisors.com(800)999-7781